The Justice Department has filed a civil antitrust lawsuit that challenges the acquisition of the Tyson Foods chicken processing complex in Harrisonburg, Virginia by George's Inc. The Department is asking the U.S. District Court in Harrisonburg to declare the acquisition unlawful under antitrust laws and order appropriate equitable relief, such as divestiture of the complex.
"The department's lawsuit alleges that George's acquisition of Tyson's Harrisonburg chicken processing facility would reduce growers' ability to receive competitive prices for their services," said Christine Varney, Assistant Attorney General in charge of the Department of Justice's Antitrust Division. "America's farmers deserve competitive prices and terms for the sale of their services, and the Antitrust Division will vigorously pursue anticompetitive acquisitions that stand in the way of achieving that goal."
Prior to the acquisition, three chicken processors - Tyson, George's and JBS/Pilgrim's Pride - competed in Virginia's Shenandoah Valley region for the services of local chicken growers. By combining the Tyson plant with George's Edinburg, Va., operations, the sale decreased the number of processors in the area to two, reducing competition for grower services.
The acquisition by George's Inc. was not required to be reported under the Hart-Scott-Rodino Antitrust Improvements Act of 1976, which requires companies to notify and provide information to the department and the Federal Trade Commission before consummating certain size acquisitions. The purchase price of the transaction was less than the minimum reporting threshold.
Despite the lack of Hart, Scott, Rodino oversight, the Justice Department's Antitrust Division opened an investigation into the proposed deal. The department sought information on the potential competitive effects of the transaction, and George's proposed business justifications for purchasing the Edinburg plant, according to the statement announcing the May 9 legal filing.
George's is the 15th largest chicken processor in the U.S. with output of more than 20 million pounds of chicken per week. Tyson Foods is the largest chicken processor in the country with output of more than 205 million pounds of chicken per week.